SINGAPORE (Mar 1): UOB Kay Hian is reiterating its &ldquo buy&rdquo on ISDN Holdings with a target price of 35 cents on strong demand for motion control devices and higher orders from existing and new customers.

In FY17, ISDN reported an 85.3% y-o-y surge in earnings to $9.55 million from a year ago. Revenue inceased 13% to $292.2 million.

For the full year, the group proposed a final dividend of 0.6 cent, or double the dividends declared a year ago.

Management attributed this to strong demand for motion control devices and other specialised solutions from existing customers as well as an expansion in its customer base in China and Singapore.

According to Frost & Sullivan, growth for both motion control devices and general integrated engineering solutions in China is expected to be healthy.

In a Thursday report,  analyst Edison Chen says the company&rsquo s early move into the Chinese market was well-timed and ISDN continues to reap the benefits of steady headline growth.

&ldquo We expect ISDN to grow at a clip faster than that of the markets it operates in and build up a growing cash hoard,&rdquo says Chen.

The group has also been focusing on R& D of blockchain technology in renewable energy.

The analyst believes this has the potential to spark off a fundamental transformation of modern energy grids, paving the way for new business opportunities in the management of and investment in high-quality rooftop solar power distribution as well as power storage solutions.

&ldquo We also do not rule out the possibility of peer-to-peer energy trading. The creation of an attendant cryptocurrency backed by intrinsic value may potentially open the door to other blockchain-related projects involving financing and investments,&rdquo says Chen.

As at 4.40pm, shares in ISDN are trading at 22 cents or 6.4 times FY18 earnings with a dividend yield of 3.9%.